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The oil and gas development in western North Dakota has brought a lot of new companies, and a lot of new people, who now call Minot “home.” That’s how City of Minot Mayor, Chuck Barney began his statement of a “do pass” for House Bill 1366 at the capital to the House Finance and Taxation committee.
The testimony for a “Do pass” was one of several in support of a House Bill that relates to oil and gas gross production tax definitions and allocations. This bill makes changes to the oil and gas gross production tax distribution formula by allows the hub city calculation to revert back to using the mining employment percentages. Using current mining employment percentages, this change would cause an increase in the amounts going to hub cities of about $26,800,000 over current law.
“On a day-to-day basis, costs to operate the city have grown to try to maintain and service the infrastructure,” explained Mayor Barney. “The City and its residents have committed to take on a large portion of these energy impacts by way of property taxes and higher than average utility rates”
The City of Minot supplies water to much of Northwestern North Dakota, which includes several oil producing counties. That stress on the system contributes to those higher rates which doubled in a decade. That rise gives Minot the highest rate of comparable cities.
During his testimony, Mayor Barney mentioned the large “jump” in Minot’s estimated population from 2009 to 2015. Growing from over 36,000 people to nearly 50,000 in just six years but did note the latest plateau of growth.
“The slow-down in energy development has provided the city an opportunity to “catch” our breath. However, the amount of debt the city has taken on to address the growth is significant.” argued Barney.
In the past four years, the city’s debt has increased 165 percent. The city anticipates bonding for an additional $27.6 million for projects underway to include flood control in 2017.
“Financial support through the oil and gas distribution formula is still necessary for the communities in the energy-impacted area to ensure the communities have the ability to provide the basic needs for the citizens.” summarized Mayor Barney. “The impact is not isolated to any one city but is impacting an entire region. Therefore, I encourage you to give HB 1366 a “Do Pass” recommendation from this committee.”